textbook understanding and managing organizational behavior 6th ed

Preface xxiChapter 1 Introduction to Organizational Behavior 2 Appendix: A Short History of Organizational Behavior Research 35 PART 1INDIVIDUALS IN ORGANIZATION36 Chapter 2 Individual D

Understanding and ManagingOrganizationalBehavior

Understanding and ManagingOrganizationalBehavior

SIXTH EDITION

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Library of Congress Cataloging-in-Publication Data

George, Jennifer M.Understanding and managing organizational behavior / Jennifer M George, Gareth Jones — 6th ed.

p cm.Includes bibliographical references and index.ISBN 978-0-13-612443-6

1 Organizational behavior.2 Organizational effectiveness.I Jones, Gareth R.II Title HD58.7.G454 2012

10 9 8 7 6 5 4 3 2 1

ISBN 10:0-13-612443-7ISBN 13: 978-0-13-612443-6

Preface xxi

Chapter 1 Introduction to Organizational Behavior 2

Appendix: A Short History of Organizational Behavior Research 35

PART 1INDIVIDUALS IN ORGANIZATION36

Chapter 2 Individual Differences: Personality and Ability 36

Chapter 3 Values, Attitudes, and Moods and Emotions 64

Chapter 4 Perception, Attribution, and the Management of Diversity 94

Chapter 5 Learning and Creativity 126

Chapter 6 The Nature of Work Motivation 154

Chapter 7 Creating a Motivating Work Setting 180

Chapter 8 Pay, Careers, and Changing Employment Relationships 210

Chapter 9 Managing Stress and Work-Life Balance 242

PART 2GROUP AND TEAM PROCESSES276

Chapter 10 The Nature of Work Groups and Teams 276

Chapter 11 Effective Work Groups and Teams 306

Chapter 12 Leaders and Leadership 336

Chapter 13 Power, Politics, Conflict, and Negotiation 370

Chapter 14 Communicating Effectively in Organizations 400

Chapter 15 Decision Making and Organizational Learning 434

PART 3ORGANIZATIONAL PROCESSES468

Chapter 16 Organizational Design and Structure 468

Chapter 17 Organizational Culture and Ethical Behavior 500

Chapter 18 Organizational Change and Development 530

Appendix Research Methods in Organizational Behavior 560Glossary 566

References 575Name Index 624Company Index 632Subject Index 634

Preface xxi

Chapter 1 Introduction to Organizational Behavior 2

Opening CaseUrsula Burns Succeeds Anne Mulcahy as CEO of Xerox3Overview4

What Is Organizational Behavior?5

The Nature of Organizational Behavior5Levels of OB6

OB and Management8Managerial Functions9

■OB TODAY: How Joe Coulombe Used OB to Make Trader Joe’s a Success Story11

Managerial Roles12Managerial Skills12

Challenges for OB13Challenge 1: The Changing Social and Cultural Environment14

Developing Organizational Ethics and Well-Being14■ETHICS IN ACTION: How Unethical Behavior Shut Down a Meat-packingPlant16

Dealing with a Diverse Workforce17

Challenge 2: The Evolving Global Environment19

Understanding Global Differences19

Global Learning21Global Crisis Management22

Challenge 3: Advancing Information Technology23

IT and Organizational Effectiveness24IT, Creativity, and Organizational Learning24

Challenge 4: Shifting Work and Employment Relationships25

■YOU’RE THE MANAGEMENT EXPERT: Moving to Self-Managed Teams26

EXERCISES IN UNDERSTANDING AND MANAGING

CLOSING CASE:How Jeff Bezos Manages at Amazon.com31

Appendix: A Short History of OB 32

F W Taylor and Scientific Management32The Work of Mary Parker Follett33The Hawthorne Studies and Human Relations33Theory X and Theory Y34

Theory X34Theory Y34

PART 1INDIVIDUALS IN ORGANIZATIONS36

Chapter 2 Individual Differences: Personality and Ability 36

Opening CaseNooyi’s Determination37Overview38

VII

The Nature of Personality38

Determinants of Personality: Nature and Nurture39Personality and the Situation39

■FOCUS ON DIVERSITY: Liane Pelletier Transforms Alaska Communications41

Personality: A Determinant of the Nature of Organizations42

The Big Five Model of Personality42

Extraversion43Neuroticism44Agreeableness45Conscientiousness45Openness to Experience45

■YOU’RE THE MANAGEMENT EXPERT: Understanding a New Employee48

Conclusions49

Other Organizationally Relevant Personality Traits49

Locus of Control49Self-Monitoring49Self-Esteem50Type A and Type B Personalities51Needs for Achievement, Affiliation, and Power52How Personality Is Measured53

The Nature of Ability53

Cognitive Ability53Physical Ability54Where Do Abilities Come from and How Are They Measured?55Emotional Intelligence: A Different Kind of Ability56

The Management of Ability in Organizations57

Selection58Placement58Training58

EXERCISES IN UNDERSTANDING AND MANAGING

CLOSING CASE:Mark Wilson Creates a Different Kind of Telemarketer63

Chapter 3 Values, Attitudes, and Moods and Emotions 64

Opening CaseSatisfied, Committed, and Happy Employees at Nugget Markets65Overview66

Values, Attitudes, and Moods and Emotions66

The Nature of Values67■ETHICS IN ACTION: Gentle Giant Moving Company Values Honesty70

The Nature of Work Attitudes71The Nature of Moods and Emotions71Relationships Between Values, Attitudes, and Moods and Emotions74

Job Satisfaction75

■OB TODAY: Job Satisfaction Declines in the United States76

Determinants of Job Satisfaction76

Theories of Job Satisfaction79

The Facet Model of Job Satisfaction80Herzberg’s Motivator-Hygiene Theory of Job Satisfaction81

The Discrepancy Model of Job Satisfaction82The Steady-State Theory of Job Satisfaction83Measuring Job Satisfaction83

Potential Consequences of Job Satisfaction83

Does Job Satisfaction Affect Job Performance?83Absenteeism85

Turnover85Organizational Citizenship Behavior87Employee Well-Being87

Organizational Commitment88

Determinants of Affective Commitment88

■YOU’RE THE MANAGEMENT EXPERT: Increasing Affective Commitment 88

Potential Consequences of Affective Commitment89

EXERCISES IN UNDERSTANDING AND MANAGING

CLOSING CASE:Paetec’s Values Lead to a Satisfied and Committed Workforce93

Chapter 4 Perception, Attribution, and the Management of Diversity 94

Opening CaseEffectively Managing Diversity is an Ongoing Journey95Overview 96

The Nature of Perception97

Motivation and Performance98Fairness and Equity98Ethical Action99

Characteristics of the Perceiver99

Schemas: The Perceiver’s Knowledge Base100■FOCUS ON DIVERSITY: Discrimination in Layoff Decisions101

The Perceiver’s Motivational State102The Perceiver’s Mood103

Characteristics of the Target and Situation103

Ambiguity of the Target104Social Status of the Target104Impression Management by the Target105Information Provided by the Situation106Standing Out in the Crowd: The Effects of Salience in a Situation107■ETHICS IN ACTION: Disabled Employees Key to Success at HabitatInternational109

Biases and Problems in Person Perception110

Primacy Effects111Contrast Effects111Halo Effects111Similar-to-Me Effects112Harshness, Leniency, and Average Tendency Biases112Knowledge-of-Predictor Bias112

Attribution Theory113

Internal and External Attributions114Attributional Biases115

■YOU’RE THE MANAGEMENT EXPERT: Helping a Coworker116

Effectively Managing a Diverse Workforce116

Securing Top-Management Commitment to Diversity117

Diversity Training117Education117Mentoring Programs118Sexual Harassment119

EXERCISES IN UNDERSTANDING AND MANAGING

CLOSING CASE:Sodexo and Principle Financial Group Recognized for the EffectiveManagement of Diversity125

Chapter 5 Learning and Creativity 126

Opening CaseUPS Is Very Serious About Learning127Overview128

The Nature of Learning129Learning through Consequences129

Encouraging Desired Behaviors through Positive and Negative Reinforcement130Shaping133

Discouraging Undesired Behaviors through Extinction and Punishment133Organizational Behavior Modification135

Ethical Issues in OB MOD136

Learning from Others136

Learning on Your Own140

Beliefs about One’s Ability to Learn: The Role of Self-Efficacy141Sources of Self-Efficacy142

Learning by Doing143Continuous Learning through Creativity143

The Creative Process143Characteristics of Employees That Contribute to Creativity145

■OB TODAY: Jim Newton’s Openness to Experience Helps Others Be Creative 145

Characteristics of the Organizational Situation That Contribute to Creativity146The Interaction of Personality and Situational Factors147

■YOU’RE THE MANAGEMENT EXPERT: Encouraging Independent Thinking148

The Learning Organization148

EXERCISES IN UNDERSTANDING AND MANAGING

CLOSING CASE:Continuous Learning and Innovation153

Chapter 6 The Nature of Work Motivation 154

Opening CaseHigh Motivation at Enterprise Rent-A-Car155Overview156

What is Work Motivation?157

Direction of Behavior157Level of Effort158Level of Persistence158The Distinction Between Motivation and Performance158Intrinsic and Extrinsic Motivation159

Theories of Work Motivation160

Need Theory160

Maslow’s Hierarchy of Needs161Alderfer’s ERG Theory162The Research Evidence163

Expectancy Theory163

Valence: How Desirable Is an Outcome?164

■OB TODAY: Motivating Loyal Employees at the Container Store164

Instrumentality: What Is the Connection Between Job Performance and Outcomes?165Expectancy: What Is the Connection Between Effort and Job Performance?166The Combined Effects of Valence, Instrumentality, and Expectancy on Motivation167

Equity Theory168

Equity168Inequity169Ways to Restore Equity169The Effects of Inequity and the Research Evidence170

Organizational Justice Theory170

Forms of Organizational Justice170

■YOU’RE THE MANAGEMENT EXPERT: When Equal Treatment Backfires171

■ETHICS IN ACTION: Organizational Justice at Genentech173

Consequences of Organizational Justice174

EXERCISES IN UNDERSTANDING AND MANAGING

CLOSING CASE:Motivating Employees at the SAS Institute178

Chapter 7 Creating a Motivating Work Setting 180

Opening CaseHigh Motivation Results in Exceptional Customer Service at Zappos181Overview182

Job Design: Early Approaches183

Scientific Management183Job Enlargement and Job Enrichment185

Job Design: The Job Characteristics Model186

Core Job Dimensions186

■OB TODAY: Tough Economic Times Result in Changes in Job Design188

The Motivating Potential Score188Critical Psychological States192Work and Personal Outcomes193The Role of Individual Differences in Employees’ Responses to Job Design193The Research Evidence195

Job Design: The Social Information Processing Model195

■YOU’RE THE MANAGEMENT EXPERT: Redesigning Jobs196

The Role of the Social Environment196The Role of Past Behaviors197

Job Design Models Summarized198

■FOCUS ON DIVERSITY: Job Sharing a Viable Option199Organizational Objectives200

Goal Setting202

What Kinds of Goals Lead to High Motivation and Performance?202Why Do Goals Affect Motivation and Performance?203

Limits to Goal-Setting Theory204Management by Objectives204

Goal Setting and Job Design as Motivation Tools205

EXERCISES IN UNDERSTANDING AND MANAGING ORGANIZATIONAL

CLOSING CASE:Motivating Employees at Google209

Chapter 8 Pay, Careers, and Changing Employment Relationships 210

Opening CaseChanging Employment Relations in Tough Economic Times211Overview212

Psychological Contracts213

Determinants of Psychological Contracts213Types of Psychological Contracts214

When Psychological Contracts Are Broken216

Performance Appraisal217

Encouraging High Levels of Motivation and Performance217Providing Information for Decision Making219

Developing a Performance Appraisal System219

■YOU’RE THE MANAGEMENT EXPERT: Promoting High-Quality CustomerService222

Potential Problems in Subjective Performance Appraisal225

Pay and the Employment Relation226

Merit Pay Plans226

■OB TODAY: Acknowledging High Performers During a Recession226

Should Merit Pay Be Based on Individual, Group, or Organizational Performance?227Should Merit Pay Be in the Form of a Salary Increase or a Bonus?228

Examples of Merit Pay Plans228The Ethics of Pay Differentials and Comparable Worth229

Careers230

The Nature of Careers230Types of Careers231Career Stages231Contemporary Career Challenges235

EXERCISES IN UNDERSTANDING AND MANAGING

CLOSING CASE:Valuing Employees at Costco241

Chapter 9 Managing Stress and Work-Life Balance 242

Opening CaseJob Loss and Its Consequences243Overview244

The Nature of Stress245

■ETHICS IN ACTION: Violence in the Workplace246

Individual Differences and Stress247Consequences of Stress248

Sources of Stress251

Personal Stressors252

Job-Related Stressors254Group- and Organization-Related Stressors256Stressors Arising Out of Work-Life Balance258Environmental Uncertainty258

Coping with Stress260

Problem-Focused Coping Strategies for Individuals260Emotion-Focused Coping Strategies for Individuals261Problem-Focused Coping Strategies for Organizations262

■YOU’RE THE MANAGEMENT EXPERT: Coping with the Stress of a Challenging New Job264

■FOCUS ON DIVERSITY: On-Site Child Care and Family Friendly Benefits at Guerra DeBerry Coody266

Emotion-Focused Coping Strategies for Organizations267

■OB TODAY: Alleviating Stress Through Organizational Support268

EXERCISES IN UNDERSTANDING AND MANAGING

CLOSING CASE:Stress and Burnout Among Entrepreneurs and the Self-Employed275

PART 2GROUP AND TEAM PROCESSES276

Chapter 10 The Nature of Work Groups and Teams 276

Opening CaseTeams and Innovation at Cisco Systems277Overview278

How Groups Control Their Members: Roles and Rules288

Roles288Written Rules289

■OB TODAY: Zingerman’s “Steps” to Success289How Groups Control Their Members: Group Norms290

Why Do Group Members Conform to Norms?291Idiosyncrasy Credit291

The Pros and Cons of Conformity and Deviance292Balancing Conformity and Deviance292

■OB TODAY: Deviance and Conformity in Design Teams at IDEO294

Ensuring that Group Norms are Functional for the Organization295

■YOU’RE THE MANAGEMENT EXPERT: Aligning Goals296

Socialization: How Group Members Learn Roles, Rules, and Norms296

Socialization and Role Orientation296Socialization Tactics297

SUMMARY300EXERCISES IN UNDERSTANDING AND MANAGING

CLOSING CASE:Teams Fuel Global Innovation at Whirlpool304

Chapter 11 Effective Work Groups and Teams 306

Opening CaseHow Nokia Uses Teams to Increase Global Effectiveness307Overview308

Process Losses, Process Gains, and Group Effectiveness308

Potential Performance?308Process Losses and Performance309

■OB TODAY: Process Losses Can Have Deadly Consequences in Hospitals310

Process Gains and Performance311

■OB TODAY: The Rolling Stones Learn to Play Together312Social Loafing: A Problem in Group Motivation and Performance313

Group Size and Social Loafing314Ways to Reduce Social Loafing314

■OB TODAY: How GlaxoSmithKline Used Groups to Boost Productivity316

How Task Characteristics Affect Group Performance316

Pooled Interdependence317Sequential Interdependence317Reciprocal Interdependence319

■YOU’RE THE MANAGEMENT EXPERT: What Kinds of Groups and Tasks?321

Group Cohesiveness and Performance321

Factors that Contribute to Group Cohesiveness321Consequences of Group Cohesiveness322

Important Organizational Groups325

The Top Management Team325Self-Managed Work Teams325

■OB TODAY: Dick’s Drive-In Restaurants327

Research and Development Teams328Virtual Teams330

EXERCISE IN UNDERSTANDING AND MANAGING

CLOSING CASE:Why Microsoft’s Measurement System Led to Problems with GroupPerformance335

Chapter 12 Leaders and Leadership 336

Opening CaseHow Sony’s “Gaijin” CEO Changed Its Leadership Approach337Overview338

Introduction to Leadership339Early Approaches to Leadership340

The Leader Trait Approach340The Leader Behavior Approach340

■OB TODAY: John Chambers of Cisco Systems Develops a CollaborativeLeadership Approach342

The Behavior Approach: Leader Reward and Punishing Behavior343Measuring Leader Behaviors343

What Is Missing in the Trait and Behavior Approaches?344

Fiedler’s Contingency Theory of Leadership345

Leader Style345Situational Characteristics346The Contingency Model347

Contemporary Perspectives on Leadership349

Path-Goal Theory: How Leaders Motivate Followers349

■OB TODAY: A Sister Act Helped Claire’s Stores to Sparkle351

The Vroom and Yetton Model: Determining the Level of Subordinate Participation in Decision Making352

Leader–Member Exchange Theory: Relationships Between Leaders and Followers353

Does Leadership Always Matter in Organizations?354

Leadership Substitutes354Leadership Neutralizers355The Romance of Leadership355

■YOU’RE THE MANAGEMENT EXPERT: How to Lead Me356

New Topics in Leadership Research356

Transformational and Charismatic Leadership356

Leader Mood359Gender and Leadership359

■OB TODAY: Female Manufacturing Plant Managers Help Increase Product Quality360

Chapter 13 Power, Politics, Conflict, and Negotiation 370

Opening CasePfizer’s John MacKay Uses Power and Politics to Increase Performance371

Overview372The Nature of Power and Politics372Sources of Individual Power373

Sources of Formal Individual Power374■ETHICS IN ACTION: New York City Taxi Drivers Make a Fast Buck375

Sources of Informal Individual Power376

■YOU’RE THE MANAGEMENT EXPERT: Identifying Who Has Power377

Sources of Functional and Divisional Power377

Ability to Control Uncertain Contingencies377Irreplacability378

Centrality378■ETHICS IN ACTION: Two Judges Use Their Power and Control Over Their Courtsto Corrupt Them378

Ability to Control and Generate Resources379

Organizational Politics: The Use of Power380

Tactics for Increasing Individual Power380

■OB TODAY: Bob Iger Uses His Political Skills to Change Walt Disney382

Managing Organizational Politics383

What Is Organizational Conflict?384

Sources of Organizational Conflict385Differentiation385

Task Relationships386Scarcity of Resources386

Pondy’s Model of Organizational Conflict386

Latent Conflict386Perceived Conflict387Felt Conflict387

■OB TODAY: Manifest Conflict Erupts Between eBay and Its Sellers387

Manifest Conflict388Conflict Aftermath389

■OB TODAY: When Partners Battle for Control of Their Company390Negotiation: Resolving Conflict391

Individual-Level Conflict Management392Group-Level Conflict Management392Promoting Compromise394

EXERCISES IN UNDERSTANDING AND MANAGING

CLOSING CASE:Mixing Business and Family Causes Conflict399

Chapter 14 Communicating Effectively in Organizations 400

Opening CaseToyota Is Accused of Being a Poor Communicator401Overview402

What Is Communication?402

The Functions of Communication403■ETHICS IN ACTION: A Peanut Company’s Use of Communication Causes ManyProblems406

Communication Networks in Organizations407

The Communication Process409

The Sender and the Message409Encoding410

The Medium411The Receiver: Decoding and the Feedback Loop413

Barriers to Effective Communication413

Filtering and Information Distortion414

■OB TODAY: Why Communication Is Vital on an Airliner414

Poor Listening416

■OB TODAY: The Consequences of Poor Listening Skills416

Lack of or Inappropriate Feedback417Rumors and the Grapevine417Workforce Diversity417Differences in Cross-cultural Linguistic Styles418

■GLOBAL VIEW: Honda and Foxconn Have a Communication Problem

Selecting an Appropriate Communication Medium419

Information Richness419

■OB TODAY: Telemarketing Turns-Off Customers421

Trade-Offs in the Choice of Media422Using Advanced IT422

Persuasive Communication423

■YOU’RE THE MANAGEMENT EXPERT: How to Speed Product Development424

A Model of Persuasive Communication424

■OB TODAY: A Failure in Communication426

Communication in Crisis Situations427

EXERCISES IN UNDERSTANDING AND MANAGING

CLOSING CASE:How Chrysler’s Tom Lasorda Learned How to Talk to Employees433

Chapter 15 Decision Making and Organizational Learning 434

Opening CaseMattel Wins the War in Toyland435Overview436

Ethical Decision Making440

■ETHICS IN ACTION: Guidant’s Major Ethical Lapse441

The Decision-Making Process442

The Classical Model of Decision Making442March and Simon’s Administrative Model of Decision Making443

Sources of Error in Decision Making444

Heuristics and Their Effects445Escalation of Commitment446The Role of Information Technology447

Group Decision Making449

Advantages of Group Decision Making449Disadvantages of Group Decision Making450Other Consequences of Group Decision Making452Decision Making in Crisis Situations453

■YOU’RE THE MANAGEMENT EXPERT: Solving Competition BetweenTeams453

Group Decision-Making Techniques454

Brainstorming454The Nominal Group Technique455The Delphi Technique455Group Decision-Making Techniques Used in Total Quality Management455

■OB TODAY: How Plexus Decided It Could Make Flexible Manufacturing Pay Off456

Organizational Learning457

Types of Organizational Learning458

■OB TODAY: IDEO Helps Organizations “Learn How to Learn”458

Principles of Organizational Learning459

■OB TODAY: How to Create a Learning Organization461

Leadership and Learning462

EXERCISES IN UNDERSTANDING AND

CLOSING CASE:Turnaround Decision Making at Liz Claiborne466

PART 3ORGANIZATIONAL PROCESSES468

Chapter 16 Organizational Design and Structure 468

Opening CaseAvon Reorganizes Its Global Structure469Overview470

Designing Organizational Structure470

The Organizational Environment471Technology471

Human Resources and the Employment Relationship473Organic and Mechanistic Structures473

Grouping Jobs into Functions and Divisions474

■YOU’RE THE MANAGEMENT EXPERT: Which Work System Is the Best?474

Functional Structure475Divisional Structures: Product, Market, and Geographic476

■OB TODAY: Why the Houston ISD Changed to a Market Structure477

Advantages of a Divisional Structure478Disadvantages of a Divisional Structure479Matrix Structure480

Summary481

Coordinating Functions and Divisions481

Allocating Authority481

■OB TODAY: Caterpillar Gets Leaner and More Focused484

■OB TODAY: To Centralize or Decentralize—That Is the Question485

Mutual Adjustment and Integrating Mechanisms486

Standardization489

New IT-Enabled Forms of Organizational Design and Structure491

The Effects of IT Inside Organizations491

The Effects of IT Between Organizations493

EXERCISES IN UNDERSTANDING AND MANAGING

CLOSING CASE:Home Depot’s Military-Style Structure498

Chapter 17 Organizational Culture and Ethical Behavior 500

Opening CaseHow a New CEO Transformed Ford’s Culture501Overview502

What Is Organizational Culture?502

How Is an Organization’s Culture Transmitted to Its Members?504

Socialization and Socialization Tactics504Stories, Ceremonies, and Organizational Language505

■OB TODAY: UPS and Walmart Know How to Build Persuasive Cultures507

■YOU’RE THE MANAGEMENT EXPERT: A Culture of Cleanliness508

Factors Shaping Organizational Culture509

Characteristics of People Within the Organization509Organizational Ethics510

■ETHICS IN ACTION: Apple: Do You Protect Your Products or the Workers WhoAssemble Them?511

The Employment Relationship513

■OB TODAY: How Making Employees Owners Can Change Organizational Culture514

Organizational Structure515Adaptive Cultures versus Inert Cultures515

■OB TODAY: How Google’s Founders Created a Groovy Culture516

Traits of Strong, Adaptive Corporate Cultures517

Values from the National Culture518

Hofstede’s Model of National Culture519

Creating an Ethical Culture522

Why Does Unethical Behavior Occur?523■ETHICS IN ACTION: Jim McCormick’s ADE-51 “Bomb Detector”524

Ways to Create an Ethical Culture524

EXERCISES IN UNDERSTANDING AND MANAGING

CLOSING CASE:Why 3M Has an Innovative Culture529

Chapter 18 Organizational Change and Development 530

Opening CaseDell Struggles to Regain Its Leadership531Overview532

Forces for and Resistance to Organization Change533

Forces for Change533■ETHICS IN ACTION: Outsourcing and Sweatshops: Do They Go Hand in Hand?535

Impediments to Change536

Organization-Level Resistance to Change537

Group-Level Resistance to Change538Individual-Level Resistance to Change538Lewin’s Force-Field Theory of Change538

Evolutionary and Revolutionary Change in Organizations539

Evolutionary Change I: Sociotechnical Systems Theory539Evolutionary Change II: Total Quality Management540

■OB TODAY: Starwood’s Work to Satisfy Its Customers541

Revolutionary Change I: Reengineering542

■OB TODAY: Hallmark Card Wakes Up543

Revolutionary Change II: Restructuring544Revolutionary Change III: Innovation545

Managing Change: Action Research546

Diagnosis of the Organization547Determining the Desired Future State547Implementing Action547

Evaluating the Action548

■YOU’RE THE MANAGEMENT EXPERT: Bringing Change to a Restaurant549

Institutionalizing Action Research549

Organization Development550

OD Techniques to Deal with Resistance to Change550

■OB TODAY: Crisis After Crisis Seem to Plague BP551

OD Techniques to Promote Change552

EXERCISES IN UNDERSTANDING AND MANAGING

CLOSING CASE:How United Technologies Manages the Change Process559

Appendix Research Methods in Organizational Behavior 560Glossary 566

References 575Name Index 624Company Index 632Subject Index 634

In the sixth edition of Understanding and Managing Organizational Behavior, we keep to our

theme of providing students with the most contemporary and up-to-date account of the changingissues involved in managing people in organizations In revising this book, we have continuedour focus on making our text relevent and interesting to students—something we have learnedfrom feedback received from instructors who tell us the text engages students and encouragesthem to make the effort necessary to assimilate the text material We continue to mirror thechanges taking place in the real world of work by incorporating recent developments in organi-zational behavior and research and by providing vivid, current examples of the way managersand employees of companies large and small have responded to the changing workplace Indeed,we have increased our focus on small businesses and startups and the organizational behaviorchallenges their employees face

The number and complexity of the organizational and human resource challenges facingmanagers and employees at all levels has continued to increase over time, especially because oftoday’s hard economic times In most companies, managers and employees are playing “catch-up”as organizations work to meet these challenges by employing fewer employees and implementingnew and improved organizational behavior techniques and practices to increase performance.Today, relatively small differences in performance between companies, for example, in the speed atwhich they can bring new products to market, or in the ways they motivate their employees to findways to reduce costs or improve customer service, can combine to give one company a competitiveedge over another Managers and companies that utilize proven organizational behavior (OB)techniques and practices in their decision making increase their effectiveness over time Companiesand managers that are slower to implement new OB techniques and practices find themselves at agrowing competitive disadvantage, especially because their best employees often depart to joinfaster-growing companies

Our challenge in revising Understanding and Managing Organizational Behavior has been

to incorporate and integrate the latest advances in theorizing and research and provide a thoroughand contemporary account of the factors that influence organizational behavior Importantly, westrived to convey this knowledge to students in a very readable, applied, hands-on format toincrease their understanding and enjoyment of the learning process

What’s New in This Edition

In response to the positive comments and support of our users and reviewers, we have continuedto refine and build on the major revisions we made to the last edition The revised edition of

Understanding and Managing Organizational Behavior mirrors the changes taking place in the

world today, both on a global dimension and in terms of the ways the changing nature of work isaffecting organizational behavior

First, we have extended our coverage of ethics, ethical behavior, and social responsibilitybecause of the continuing controversies and scandals that have involved a growing number ofwell-known companies in the 2000s We have more in-depth coverage of ethics both in terms ofnew content areas within chapters and in the many kinds of company examples we use to illustratewhat organizations can do to curb individual self-interest and promote ethical organizationalbehavior Many specific issues such as ethical dilemmas, ethical leadership, building a sociallyresponsible culture, and the role of ethics officers are now included in the new edition Second, theincreasing globalization of business and diversity of the workforce has led us to extend our cover-age of the many opportunities and challenges globalization and diversity pose for understandingand managing organizational behavior today Some of the major specific changes or updates wehave made to our book include:

■ New opening chapter cases that deal with important contemporary issues For example, theOpening Case for Chapter 7 profiles how the innovative on-line retailer Zappos motivatesits employees to provide exceptional service to customers; the Opening Case for Chapter 9provides a close look at the devastating effects that job loss has had for employees and

XXI

their families around the United States; and the Opening Case for Chapter 10 describeshow Cisco Systems relies on teams to innovate around the globe In addition, new andupdated chapter boxes and new closing cases to encourage in-class discussion Forexample, the closing case for Chapter 2 describes how Mark Wilson, founder of Ryla Inc.,created a different kind of customer contact business by providing a supportive, caring, and developmental environment for employees; the closing case for Chapter 7 describeshow Google motivates employees; and the Global View box in Chapter 8 profiles thechanging nature of psychological contracts and employment relations in Japan We havecarefully chosen a wide range of large and small companies to examine the issues facingcompanies as they attempt to increase their effectiveness in an increasingly competitiveglobal environment.

■ New material on how tough economic times can spur employees to take proactive steps tomodify the design of their jobs via job crafting, which also leads managers to change thedesign of jobs; what managers can do to motivate and reward employees when resourcesare scarce, especially when their employees are also required to perform additional tasks orwork harder to maintain organizational performance; and new material about job loss andits consequences, including rising stress, that arise because of economic concerns (forexample, new material on job satisfaction levels at record lows in the United States andwhy layoffs can be so devastating for employees and hence the need for organizations tomanaging layoffs in a humane fashion)

■ Expanded coverage of ethics and the steps organizations can take to improve the way managers and employees make ethical choices, especially in uncertain situations; and many new boxes on the way employees respond to ethical problems and on how organizations are emphasizing the importance of enforcing codes of ethics

■ Increased coverage of issues that arise from increasing workforce diversity at a timewhen millions of baby boomers are retiring and fewer middle managers exist because ofdownsizings and layoffs; and how organizations such as Northrop Grumman and GE arecreating heterogeneous groups composed of younger and older, more experiencedemployees, to help transfer job-specific knowledge and experience to younger,inexperienced employees

■ Expanded discussion of the role of personality, emotion, and mood in organizations and ofrecent research on emotional intelligence (for example, new coverage about how peoplereported to be somewhat introverted have been successful in their careers, including BillGates, Warren Buffett, Charles Schwab, and Andrea Jung)

■ Increased coverage of the importance of organizational learning at all levels from CEO to first-level employees and how increased training and education of employees is resultingin many changes in the way organizations operate—at the task, job, group, and organiza-tional levels

Our intention has been to provide students with the most up-to-date, readable, succinctaccount of organizational behavior on the market To accomplish this, we have only drawn on thetheories and concepts that have received the most empirical research support and acceptance bythe academic community We have also worked hard to streamline the discussion in the text andmake the material even more appealing to students

Organization of the Book

Once again, in terms of the way our book is organized, Chapter 1 discusses contemporaryorganizational behavior issues and challenges; it also provides an approach to understandingand managing organizational behavior that sets the scene for the rest of the book In Part One,“Individuals in Organizations,” we underscore the many ways in which people can contributeto organizations and how an understanding of factors such as personality, emotional intelli-gence, creativity, and motivation can help organizations and their members channel effort andbehavior in ways that promote the achievement of organizational objectives and the well-beingof all organizational stakeholders including employees Chapters 2, 3, and 4 provide extensive

coverage of personality, emotional intelligence, mood and emotion, values and ethics, and theproactive management of diversity; importantly, we link these factors to important behaviorsand determinants of organizational effectiveness Chapter 5 conveys the variety of ways inwhich organizational members can and do learn, with a new emphasis on continuous learningthrough creativity.

Our treatment of the important issue of work motivation is divided into two chapters InChapter 6, we provide an integrated account of work motivation and the latest development inmotivation theory and research Chapter 7 then focuses on how to create a motivating workenvironment through job design, organizational objectives, and goal setting Chapter 8 addressesthe changing nature of the employment relationship and the implications of factors such asoutsourcing, performance appraisal, pay differentials, and boundaryless careers for motivationand performance Lastly, in Chapter 9, we focus on the stressors people face, how they can beeffectively managed, and how to find a balance between work and other aspects of life Overall,Part One reflects both contemporary theorizing and research and the challenges and opportuni-ties facing organizations and their members

In Part Two, “Group and Team Processes,” we bring together the many ways in whichorganizational members work together to achieve organizational objectives, the challenges theyface, and how to achieve real synergies Chapters 10 and 11 focus on the key factors that lead toeffective work groups and teams Chapter 12 provides an updated treatment of leadership, partic-ularly transformational leadership in organizations Chapter 13 contains our discussion of power,politics, conflict, and negotiation In Chapter 14, we discuss how the latest developments ininformation technology have changed the nature of communication in and between organiza-tions The final chapter in this part, Chapter 15, provides updated coverage of decision making,knowledge management, and innovation

Part Three, “Organizational Processes,” separates our treatment of organizational ture and organizational culture to allow for an integrated treatment of organizational cultureand to underscore the importance of ethics Chapter 16 focuses on organizational design,structure, and control and the factors that affect important organizational design choices.Chapter 17 presents an integrated treatment of organizational culture and ethical behavior Itfocuses on the informal and formal social processes in organizations that affect the wayspeople behave, the sources of organizational culture, including organizational ethics, and thenature, causes, and consequences of ethical behavior We also discuss the factors that can leadto unethical behavior Finally, Chapter 18 provides updated coverage of organizational changeand development to reflect current realities in the very dynamic environment in which organi-zations operate

struc-In summary, the organization and content of our book keeps to its goal of providinginstructors and students with a cutting-edge coverage of organizational behavior topics andissues that our users have appreciated in prior editions For students, we provide a treatment oforganizational behavior that allows for self-assessment because it (1) is comprehensive,integrated, and makes important theories and research findings accessible and interesting tothem; (2) is current, up-to-date, and contains expanded coverage of significant contemporaryissues including ethics, diversity, globalization, and information technology; (3) uses rich,real-life examples of people and organizations to bring key concepts to life and provide clearmanagerial implications; and, (4) is experiential and applied Our extensive and engaging end-of-chapter experiential exercises contained in “Exercises in Understanding and ManagingOrganizational Behavior” give students the opportunity to catch the excitement of organiza-tional behavior as a fluid, many-faceted discipline, and they allow students to develop andpractice their own skills

Pedagogical Structure and Teaching Support

We believe no other organizational behavior textbook has the sheer range of learning features forstudents that our book has These features—some integrated into the text and some at the end ofeach chapter or part—engage students’ interest and facilitate their learning of organizationalbehavior The overall objective of these features is to help instructors actively involve theirstudents in the chapter content The teaching support includes the following:

Instructor’s Resource Center

presentation resources available with this text in downloadable, digital format Registration issimple and gives you immediate access to new titles and new editions As a registered facultymember, you download resource files and receive immediate access and instructions forinstalling Course Management content on your campus server

If you ever need assistance, our dedicated technical support team is ready to help with themedia supplements that accompany this text Visit http://247pearsoned.custhelp.com/ foranswers to frequently asked questions and toll-free user support phone numbers

The following supplements are available to adopting instructors:■ Instructor’s Manual

■ Test Item File■ TestGen Test Generating Software■ PowerPoints

■ DVD

Videos on DVD

Video segments illustrate the most pertinent topics in organizational behavior today and light relevant issues that demonstrate how people lead, manage, and work effectively Contactyour Pearson representative for the DVD

high-mymanagementlab

mymanagementlab (www.mymanagementlab.com) is an easy-to-use online tool that personalizescourse content and provides robust assessment and reporting to measure individual and class per-formance All of the resources you need for course success are in one place and are flexible and eas-ily adapted for your course experience Some of the resources include an a Pearson eText version ofthe textbook quizzes, video clips, simulations, assessments, and PowerPoint presentations thatengage you while helping you study independently

CourseSmart eTextbooks

Developed for students looking to save on required or recommended textbooks, CourseSmarteTextbooks save students money off the suggested list price of the print text Students simply selecttheir eText by title or author and purchase immediate access to the content for the duration of thecourse using any major credit card With a CourseSmart eText, students can search for specific key-words or page numbers, take notes online, print out reading assignments that incorporate lecturenotes, and bookmark important passages for later review For more information, or to purchase aCourseSmart eTextbook, visit www.coursesmart.com

Acknowledgments

Finding a way to coordinate and integrate the rich and diverse organizational behavior literatureis no easy task Neither is it easy to present the material in a way that students can easily under-stand and enjoy, given the plethora of concepts, theories, and research findings In writing

Understanding and Managing Organizational Behavior, we have been fortunate to have the

assistance of several people who have contributed greatly to the book’s final form We are verygrateful to Eric Svendsen, our editor-in-chief, and Meg O’Rourke, editorial project manager, forproviding us with timely feedback and information from professors and reviewers that haveallowed us to shape the book to meet the needs of its intended market; and to Kerri Tomasso,production editor, for ably coordinating the book’s progress We also appreciate the word-processing and administrative support of Patsy Hartmangruber, Texas A&M University, andMargaret R De Sosa of Rice University

We are very grateful to the many reviewers and colleagues who provided us with detailedfeedback on the chapters and for their perceptive comments and suggestions for improving themanuscript A special thank you goes to the following professors who gave us feedback on thistext and its previous editions:

Cheryl Adkins, Longwood UniversityDeborah Arvanites, Villanova UniversityRobert Augelli, University of KansasRegina Bento, University of BaltimoreAlicia Boisnier, University of BuffaloRobert Bontempo, Columbia UniversityW Randy Boxx, University of MississippiDan Brass, Pennsylvania State UniversityPeggy Brewer, Eastern Kentucky University

Diane Caggiano, Fitchburg State University

Elena Capella, University of San Francisco

Russell Coff, Washington UniversityJeanette Davy, Wright State UniversityDave Day, Columbia College

Lucinda DoranStewart Edwards, Marymount Universityand NVCC

Megan Endres, Eastern Michigan University

Mark Fearing, University of HoustonDave Fearon, Central Connecticut StateUniversity

Dean Frear, Wilkes UniversitySteve Grover, University of OtagoLee Grubb, East Carolina UniversityBob Gulbro, Jacksonville State UniversityJennifer Halpern, Cornell UniversityPhyllis Harris, University of Central FloridaSandra Hartman, University of NewOrleans

Dave Hennessy, Mount Mercy CollegeMary Hogue, Kent State University–StarkCampus

Ronald Humphrey, Virginia wealth University

Common-Courtney Hunt, Northern Illinois UniversityBruce Johnson, Gustavus Adolphus College

Eli Kass, Saint Joseph’s UniversityMary Kernan, University of Delaware

John Klocinski, Lourdes CollegeDeborah Litvin, Merrimack CollegeRosemary Maellero, University of DallasKaren Maher, University of Missouri–St Louis

Stephen Markham, North Carolina StateUniversity

Gary McMahan, University ofTexas–Arlington

Jeanne McNett, Assumption CollegeAngela Miles, Old Dominion UniversityLaVelle Mills, West Texas A&M UniversityJanet Near, Indiana University

Margaret Padgett, Butler UniversityTim Peterson, University of TulsaAllayne Pizzolatto, Nicholls State University

Nathan Podsakoff, University of FloridaPeter Poole, Lehigh University

Nancy Powell, Florida International University

Asha Rao, California State UniversityHayward

Elizabeth Ravlin, University of South Carolina

Diana Reed, Drake UniversitySandra Robinson, University of BritishColumbia

Tracey Rockett, University of Texasat Dallas

Hannah Rothstein, Baruch CollegeJoseph Santora, New Jersey Instituteof Technology

Chris Scheck, Northern Illinois UniversityJames Schmidtke, California State University Fresno

William Sharbrough, The CitadelShane Spiller, Morehead State UniversityChristina Stamper, Western MichiganUniversity

Eric Stephan, Brigham Young UniversityCharlotte Sutton, Auburn UniversityBrian Usilaner, University of MarylandUniversity College

Sean Valentine, University of WyomingBetty Velthouse, University of MichiganFlint

Susan Washburn, Stephen F Austin StateUniversity

Robert Whitcomb, University of WisconsinEau Claire

Frank Wiebe, University of Mississippi

Thanks are also due to Ken Bettenhausen, University of Colorado at Denver; David Bowen,Thunderbird; and Art Brief, University of Utah

Finally, we are grateful to two incredibly wonderful children, Nicholas and Julia, for beingall that they are and the joy they bring to all who know them

J.M.G.-G.R.J

Jennifer M Georgeis the Mary Gibbs Jones Professor of Management and Professor ofPsychology in the Jesse H Jones Graduate School of Business at Rice University She receivedher B.A in psychology/sociology from Wesleyan University, her M.B.A in finance from NewYork University, and her Ph.D in management and organizational behavior from New YorkUniversity Prior to joining the faculty at Rice University, she was a professor in the Departmentof Management at Texas A&M University.

Professor George specializes in organizational behavior and is well known for her researchon mood and emotion in the workplace, their determinants, and their effects on various individ-ual and group-level work outcomes She is the author of many articles in leading peer-reviewed

journals such as Academy of Management Journal, Academy of Management Review, Journal ofApplied Psychology, Organizational Behavior and Human Decision Processes, Journal ofPersonality and Social Psychology, and Psychological Bulletin One of her papers won the

Academy of Management’s Organizational Behavior Division Outstanding Competitive Paper

Award and another paper won the Human Relations Best Paper Award She is, or has been, on theeditorial review boards of Journal of Applied Psychology, Academy of Management Journal,Academy of Management Review, Journal of Management, Organizational Behavior and HumanDecision Processes, Administrative Science Quarterly, International Journal of Selection andAssessment, and Journal of Managerial Issues She was an Associate Editor for the Journal ofApplied Psychology, a consulting editor for the Journal of Organizational Behavior, and a mem-ber of the SIOP Organizational Frontier Series editorial board She is a Fellow in the American

Psychological Association, the American Psychological Society, and the Society for Industrialand Organizational Psychology, and she is a member of the Society for Organizational Behavior

She also has co-authored a leading textbook on Contemporary Management.

Gareth R Jonesreceived both his B.A and Ph.D degrees from the University of Lancaster,U.K He previously held teaching and research appointments at the University of Warwick,Michigan State University, and the University of Illinois at Urbana–Champaign Professor Jonesspecializes in both organizational behavior and organizational theory and is well known for hisresearch on socialization, culture, and applying transaction cost analysis to explain many formsof intraorganizational and interorganizational behavior He also has published many articles in

leading journals of the field and is one of the most prolific authors in the Academy of ment Review One of his articles won the Academy of Management Journal Best Paper Award.He is, or has been, on the editorial review boards of Academy of Management Review, Journal ofManagement, and Management Inquiry.

Manage-Jones is a professor of management in the Mays Business School at Texas A&M University,where he is actively involved in teaching and research in organizational behavior and related fields

OutlineOverviewWhat Is Organizational Behavior?Challenges for Organizational BehaviorChallenge 1: The Changing Social and CulturalEnvironment

Challenge 2: The Evolving Global EnvironmentChallenge 3: Advancing Information TechnologyChallenge 4: Shifting Work and EmploymentRelationships

SummaryExercises in Understanding and ManagingOrganizational Behavior

Appendix: A Short History of Organizational BehaviorIntroduction to Organizational Behavior

Learning Objectives

After reading this chapter, you should be able to:

● Define organizational behavior and explain how and why it determines the effectiveness of an organization

● Appreciate why the study of organizational behaviorimproves a person’s ability to understand andrespond to events that take place in a work setting.● Differentiate between the three levels at which

organizational behavior is examined.● Appreciate the way changes in an organization’s

external environment continually create challengesfor organizational behavior

● Describe the four main kinds of forces in theenvironment that pose the most opportunities and problems for organizations today

CHAPTER 1

In the early 2000s, Xerox, the known copier company, was nearbankruptcy because aggressive Japanese competitors were selling low-priced digital copiersthat made Xerox’s pioneering light-lens copying process obsolete The result wasplummeting sales as U.S customers bought Japanese copies and Xerox was losing billionsof dollars Xerox searched for a new CEO who had the management skills to revitalize thecompany’s product line; 26-year Xerox veteran Anne Mulcahy was chosen to lead thecompany’s transformation Mulcahy had begun her career as a Xerox copier salesperson,transferred into human resource management, and then used her considerable leadershipand communication skills to work her way up the company’s hierarchy to become itspresident.

well-As the new CEO, the biggest organizational challenge Mulcahy faced was to find waysto reduce Xerox’s high operating costs but, at the same time, find ways to developinnovative new lines of copiers Specifically, she had to decide how to invest the company’sresearch dollars to develop desperately needed new kinds of digital copiers that wouldattract customers back to the company and generate new revenues and profits.Simultaneously achieving both of these objectives is one of the biggest challenges amanager can face, and how well she performed these tasks would determine Xerox’s fate—indeed its very survival.1

To find a solution to this problem, Mulcahy, known as an unassuming person who asCEO prefers to stay in the background, focused her efforts on involving and listening toXerox’s managers, employees, and customers describe its problems Mulcahy began aseries of “town hall” meetings with Xerox employees, asked them for all kinds of creativeinput and their best efforts, but told them that tough times were ahead and that layoffswould be necessary At the same time, she emphasized that only their motivation to workhard and find ways to reduce costs and develop new products could save the company Todiscover how the company should best invest its R&D budget, Mulcahy made reaching outto customers her other main priority She insisted that managers and engineers at all levelsvisit, meet, and talk to customers to uncover what they most wanted from new digitalcopiers—and from Xerox During one of her initiatives, called “Focus 500,” which requiredXerox’s top 200 managers to visit its top 500 customers, Mulcahy came to increasinglyappreciate the skills of Ursula Burns, who had joined Xerox 4 years after her and wasquickly establishing her own reputation as a manager who knew how to motivate andlead employees Burns had started her career as a mechanical engineer and was now thetop manager in charge of its manufacturing and supply chain activities—the main sourceof its high operating costs

By listening closely to both employees and customers, Mulcahy, Burns, and Xerox’sengineers gained insights that allowed them to transform the company’s product line Theirgoal was to spend Xerox’s shrinking R&D funds to develop two new lines of digital copiers:

3

Opening Case

URSULA BURNS SUCCEEDSANNE MULCAHY AS CEO OF XEROX

How did Xerox’s CEOs turnthe company around?

Anee Mulcahy (left) and Ursula Burns devised asuccessful turnaround plan to save Xerox Mulcahyand Burns worked closely with customers to developnew strategies for Xerox based on improved productsand services In 2009, Mulcahy became the

chairperson of Xerox and hand-picked Burns tosucceed her as CEO, which Burns did in 2010.

a line of state-of-the-art digital color copying machines for use by large businesses and aline of low-end copiers offering print quality, speed, and prices that even Japanesecompetitors could not match To shrink costs, Mulcahy was forced to flatten Xerox’smanagement hierarchy and streamline its operating units that reduced the number ofemployees from 95,000 to 55,000 and cut 26 percent from corporate overhead By 2007, itwas clear that Mulcahy and her managers—in particular Ursula Burns, who was nowMulcahy’s second in command—had devised a successful turnaround plan to save Xerox,and all of its employees were committed to work together to continually improve itsproducts and performance.

Continuing to work closely with customers, Mulcahy and Burns developed newstrategies for Xerox based on improved products and services In talking to Xerox customers,for example, it became clear they wanted a combination of copying software and hardwarethat would allow them to create highly customized documents for their own customers.Banks, retail stores, and small businesses needed personalized software to create individualclient statements, for example Mulcahy decided to grow the customized services side ofXerox’s business to meet these specialized needs She also decided to replicate Xerox’s salesand customer service operations around the globe and customize them to the needs ofcustomers in each country The result was soaring profits

In 2009, Mulcahy decided she would leave the position of CEO to become Xerox’schairperson, and her hand-picked successor Ursula Burns became its next CEO.2The moveto transfer power from one woman CEO to another at the same company is exceptional,and Burns is also the first African American woman to head a public company as large asXerox Within months of becoming CEO, Burns announced a new major initiative to acquireAffiliated Computer Services for $6.4 billion so Xerox could increase its push to providehighly customized customer service Burns said the acquisition would be a major gamechanger because it would triple Xerox’s service revenue to over $10 billion and increase totalcompany revenues to $22 billion Also, $400 million in cost savings were expected Xerox’sshares have climbed 40 percent since Burns took over as CEO, and in March 2010 Mulcahyannounced her intention to retire With Ursula Burns at the helm, however, Xerox’s futurelooks bright indeed

Overview

At Xerox, Mulcahy and Burns found a way to create a set of new organizational behaviors thathave led to a cooperative, win-win situation for the company and its employees Xerox’s em-ployees work hard, are committed to their company, and today they are less inclined to leavetheir jobs than employees who work for many other high-tech companies This favorable worksituation has been created because Xerox:

● Strives to increase employees’ skills and knowledge and encourages them to takeresponsibility and to work closely with customers in ways that lead to a stream of new and improved products and better customer service

● Provides employees at all levels with rewards to encourage high performance and makessure that employees’ contributions are recognized

● Creates a work setting in which employees develop a longer-term commitment to theirorganization and are willing to cooperate and work hard to further their company’s goals.As the example of Xerox suggests, creating a favorable work situation in which people atall levels want to behave in ways that result in customers’ receiving a high-quality product doesnot happen by chance It is the result of careful planning and a solid understanding and appreci-

ation of how people behave in organizations and what kinds of things cause them to behave the

way they do The best way to gain such an understanding of people at work, and the forces that

shape their work behavior, is to study organizational behavior—the subject of this book.

In this chapter, we first define organizational behavior and discuss how a working edge of organizational behavior is essential for any person in today’s complex, global world We

knowl-then examine how changes taking place outside an organization in the global, social,

technolog-ical, and work or employment environments are changing the way people work together and

cooperate inside an organization The way rapid changes in an organization’s environment have

posed challenges for the behavior of all the people who work inside organizations is our focus.By the end of this chapter, you will understand the central role that organizational behavior playsin determining how effective an organization and all the men and women who are part of it are inachieving their goals

What Is Organizational Behavior?

To begin our study of organizational behavior, we could just say that it is the study of ior in organizations and the study of the behavior of organizations, but such a definition re-veals nothing about what this study involves or examines To reach a more useful and mean-

behav-ingful definition, let’s first look at what an organization is An organization is a collection of

people who work together and coordinate their actions to achieve a wide variety of goals.The goals are what individuals are trying to accomplish as members of an organization (earn-ing a lot of money, helping promote a worthy cause, achieving certain levels of personalpower and prestige, enjoying a satisfying work experience, and so forth) The goals are alsowhat the organization as a whole is trying to accomplish (providing innovative goods andservices that customers want; getting candidates elected; raising money for medical research;making a profit to reward stockholders, managers, and employees; and being socially respon-sible and protecting the natural environment) An effective organization is one that achievesits goals

Police forces, for example, are formed to achieve the goals of providing security for abiding citizens and providing police officers with a secure, rewarding career while they performtheir valuable services Paramount Pictures was formed to achieve the goal of providingpeople with entertainment while making a profit in the process Actors, directors, writers, andmusicians receive well-paid and interesting work

law-Organizations exist to provide goods and services that people want, and the amount and ity of these goods and services are products of the behaviors and performance of an organization’semployees—of its managers, of highly skilled employees in sales or research and development,and of the employees who actually produce or provide the goods and services Today, most peoplemake their living by working in or for some kind of company or organization People such as acompany’s owners or managers—or company employees who desire to become future owners ormanagers—all benefit from studying organizational behavior Indeed, people who seek to help orvolunteer their time to work in nonprofit or charitable organizations also must learn the principlesof organizational behavior Like most employees today, volunteers attend training courses that helpthem understand the many kinds of issues and challenges that arise when people work together andcooperate in a company or organization to benefit others, such as when they seek to aid ill,distressed, or homeless people

qual-The Nature of Organizational Behavior

Organizational behavior (OB) is the study of the many factors that have an impact on how

people and groups act, think, feel, and respond to work and organizations, and how tions respond to their environments Understanding how people behave in an organization isimportant because most people work for an organization at some point in their lives and areaffected—both positively and negatively—by their experiences in it An understanding of OBcan help people to enhance the positive, while reducing the negative, effects of working inorganizations

organiza-Most of us think we have a basic, intuitive, commonsense understanding of human behaviorin organizations because we all are human and have been exposed to different work experiences.Often, however, our intuition and common sense are wrong, and we do not really understandwhy people act and react the way they do For example, many people assume that happyemployees are productive employees—that is, that high job satisfaction causes high job

ORGANIZATION

A collection of people who worktogether and coordinate theiractions to achieve individual and organizational goals.

ORGANIZATIONAL BEHAVIOR

The study of factors that affect howindividuals and groups act in or-ganizations and how organizationsrespond to their environments.

Provides a set of toolsthat allow:

Managers to improve, enhance,or change work behaviors sothat individuals, groups, andthe whole organization canachieve their goalsPeople to understand,

analyze, and describebehavior in organizations

Organizational behaviorEXHIBIT 1.1

What is OrganizationalBehavior?

performance—or that punishing someone who performs consistently at a low level is a goodway to increase performance or that it is best to keep pay levels secret As we will see in laterchapters, all of these beliefs are either false or are true only under very specific conditions, andapplying these principles can have negative consequences for employees and organizations

The study of OB provides guidelines that help people at work to understand and appreciate themany forces that affect behavior in organizations It allows employees at all levels in an organizationto make the right decisions about how to behave and work with other people in order to achieve or-ganizational goals OB replaces intuition and gut-feeling with a well-researched body of theoriesand systematic guidelines for managing behavior in organizations The study of OB provides a setof tools—concepts and theories—that help people to understand, analyze, and describe what goeson in organizations and why OB helps people understand, for example, why they and others are mo-tivated to join an organization; why they feel good or bad about their jobs or about being part of theorganization; why some people do a good job and others don’t; why some people stay with the sameorganization for 30 years and others seem to be constantly dissatisfied and change jobs every 2years In essence, OB concepts and theories allow people to correctly understand, describe, and ana-lyze how the characteristics of individuals, groups, work situations, and the organization itself affecthow members feel about and act within their organization (see Exhibit 1.1)

Levels of OB

In practice, OB is examined at three main levels: the individual, the group, and the organizationas a whole A full understanding of OB is impossible without a thorough examination of the fac-tors that affect behavior at each level (see Exhibit 1.2)

Individuals in OrganizationsPart One

Chapter 2Chapter 3Chapter 4Chapter 5Chapter 6Chapter 7Chapter 8Chapter 9

Individual Differences:Personalityand Ability

Work Values, Attitudes, Moods,and Emotions

Perception, Attribution, and theManagement of DiversityLearning and CreativityThe Nature of Work MotivationCreating a Motivating Work Setting

Pay, Careers, and ChangingEmployment RelationshipsManaging Stress and Work–LifeBalance

Understanding and managingorganizational behaviorrequires studying

Groups and Team ProcessesPart Two

Chapter 10Chapter 11Chapter 12Chapter 13Chapter 14Chapter 15

The Nature of Work Groupsand Teams

Effective Work Groups and Teams

Leaders and LeadershipPower, Politics, Conflict,and NegotiationCommunication in OrganizationsDecision Making andOrganizational Learning

Organizational ProcessesPart Three

Chapter 16Chapter 17Chapter 18

Organizational Design andStructure

Organizational Cultureand Ethical BehaviorOrganizational Changeand Development

EXHIBIT 1.3

Components of Organizational Behavior

Much of the research in OB has focused on the way in which the characteristics of viduals (such as personality, feeling, and motivation) affect how well people do their jobs,whether they like what they do, whether they get along with the people they work with, andso on In Chapters 2 through 9, we examine individual characteristics critical in understand-ing and managing behavior in organizations: personality and ability; attitudes, values, andmoods; perception and attribution; learning; motivation; and stress and work-life linkages(see Exhibit 1.3)

indi-The effects of group or team characteristics and processes (such as communication and

decision making) on OB also need to be understood A group is two or more people who teract to achieve their goals A team is a group in which members work together intensivelyand develop team-specific routines to achieve a common group goal A virtual team is a

in-group whose members work together intensively via electronic means using a common ITplatform, and who may never actually meet The number of members in a group, the type anddiversity of team members, the tasks they perform, and the attractiveness of a group to itsmembers all influence not just the behavior of the group as a whole but also the behaviors ofindividuals within the group For example, a team can influence its members’ decisions onhow diligently they should do their jobs or how often they are absent from work, as happens atXerox Chapters 10 through 15 examine the ways in which groups affect their individualmembers and the processes involved in group interactions such as leadership, communication,and decision making

Many studies have found that characteristics of the organization as a whole (such as itsculture and the design of an organization’s structure) have important effects on the behaviorof individuals and groups The values and beliefs in an organization’s culture influence howpeople, groups, and managers interact with each other and with people (such as customersor suppliers) outside the organization Organizational culture also shapes and controls theattitudes and behavior of people and groups within an organization and thus influences theirdesire to work toward achieving organizational goals An organization’s structure controlshow people and groups cooperate and interact to achieve organizational goals The principaltask of organizational structure is to encourage people to work hard and coordinate their ef-forts to ensure high levels of organizational performance Chapters 16 through 18 examine

VIRTUAL TEAM

A group whose members worktogether intensively via electronicmeans, and who may neveractually meet.

Persons who supervise theactivities of one or moreemployees.

TOP-MANAGEMENT TEAMS

High-ranking executives who plana company’s strategy so that thecompany can achieve its goals.

ORGANIZATIONALEFFECTIVENESS

The ability of an organization to achieve its goals.

the ways organizational structure and culture affect performance, and they also examinehow factors such as the changing global environment, technology, and ethics impact workattitudes and behavior

Knowledge of OB can help Neiman Marcus employees earn their bonuses For example,OB research has found that organizations whose employees have been taught how to work as a

team, and to take pains to be helpful, courteous, and agreeable to each other and to customers

will be more effective than those organizations whose employees do not behave in this way.At Neiman Marcus, employees know what kinds of behaviors result in satisfied customers.They know that if they work hard to be courteous and agreeable to each other and to cus-tomers, they will sell more clothes and so they will achieve (a) their personal sales goal,(b) their department’s goal of never keeping customers waiting, and (c) the organization’sgoals of being profitable and providing excellent service

A working knowledge of OB is important to employees at all levels in the organizationbecause it helps them to appreciate the work situation and how they should behave toachieve their own goals (such as promotion or higher income) But knowledge of OB is par-

ticularly important to managers, people who direct and supervise the activities of one or

more employees For example, Sam Palmisano, CEO of IBM, and Ursula Burns, CEO ofXerox, have ultimate responsibility for the behavior of the hundreds of thousands of em-ployees who work for these companies The sales managers of IBM’s or Xerox’s southernregion, who control hundreds of salespeople, are also managers, as are the managers (or su-pervisors) in charge of these companies’ technical service centers who supervise smallteams of service technicians

Managers at all levels confront the problem of understanding the behavior of theirsubordinates and responding appropriately Palmisano and Burns have to manage their

companies’ top-management teams, the group of high-ranking executives who jointly

work to develop the strategies that allow an organization to achieve its goals Similarly,sales managers have to train their salespeople so that they can offer each customer the mixof IT hardware and software that best satisfies their company’s specific needs And, servicemanagers have to manage IT technicians so that they respond promptly and courteously tocustomers’ appeals for help and quickly solve their IT problems—providing customers withhigh-quality customized or personalized service is currently a major strategy of both IBMand Xerox

Each of these managers faces the common challenge of finding ways to help theorganization achieve its goals A manager who understands how individual, group, andorganizational characteristics affect and shape work attitudes and behavior can begin toexperiment to see whether changing one or more of these characteristics might increase theeffectiveness of the organization—and the individuals and groups it consists of

Organizational effectiveness is the ability of an organization to achieve its goals The

study of OB helps managers meet the challenge of improving organizational effectivenessby providing them with a set of tools

Sam Palmisano introduces thecompanies’ new products toreporters and analysts at trademeetings.

● A manager can work to raise an employee’s self-esteem or beliefs about his or her ability to accomplish a certain task in order to increase the employee’s productivity or job satisfaction.

● A manager can change the reward system to change employees’ beliefs about the extent to which their rewards depend on their performance

● A manager can change the design of a person’s job or the rules and procedures for doing the job to reduce costs, make the task more enjoyable, or make the task easier to perform

Recall from the chapter-opening case that Xerox’s goal is to attract customers by providingthem with high-quality, affordable copiers and customized service To achieve this goal, Xerox’sCEOs created a work setting in which employees were taught what kinds of organizationalbehaviors are necessary to create superior color copiers customized to the needs of differentorganizations Xerox succeeded because it chose a way to motivate and reward employees thatencourages them to work hard and well and behave in a way that benefits everyone A keychallenge for all organizations, and one that we address throughout this book, is how to encourageorganizational members to work effectively for their own benefit, the benefit of their work groups,and the benefit of their organization

Managerial Functions

The four principal functions or duties of management are planning, organizing, leading,

and controlling an organization’s human, financial, material, and other resources to increaseits effectiveness.3And, as our previous examples show, managers who are knowledgeableabout OB are in a good position to improve their ability to perform these functions (seeExhibit 1.4)

PLANNINGIn planning, managers establish their organization’s strategy—that is, they decide

how best to allocate and use resources to achieve organizational goals At Southwest Airlines,for example, CEO Gary Kelly’s goal is to provide customers with low-priced air travel, andto achieve this Southwest has created many strategies to use its resources as efficiently as possi-ble.4 For example, Southwest uses only one kind of plane, the Boeing 737, to keep downoperating, training, and maintenance costs; employees cooperate and share jobs when neces-sary to keep down costs; and the company sells its tickets on its own website—one of theeasiest to use in the industry

Planning is a complex and difficult task because managers must make decisions underuncertain conditions and so considerable risks are involved when they choose whichstrategies to pursue A knowledge of OB can help improve the quality of decision making,increase the chances of success, and lessen the risks inherent in planning and decision

PLANNING

Deciding how best to allocate and use resources to achieveorganizational goals.

MANAGEMENT

The process of planning, ing, leading, and controlling anorganization’s human, financial,material, and other resources toincrease its effectiveness.

organiz-Planning

Decide on organizational goalsand allocate and use resourcesto achieve those goals

Organizing

Establish the rules and reportingrelationships that allow people toachieve organizational goals

Controlling

Evaluate how well the organizationis achieving its goals and takeaction to maintain and improveperformance or take correctiveaction

Leading

Encourage and coordinate individuals and groups so that they work toward organizational goals

EXHIBIT 1.4

Four Functions ofManagement

SELF-MANAGED TEAMS

Groups of employees who aregiven the authority and responsi-bility to manage many different

aspects of their own organizational

behavior.

LEADING

Encouraging and coordinatingindividuals and groups so that all organizational members areworking to achieve organizationalgoals.

making First, the study of OB reveals how decisions get made in organizations and howpolitics and conflict affect the planning process Second, the way in which group decisionmaking affects planning, and the biases that can influence decisions, are revealed Third, thetheories and concepts of OB show how the composition of an organization’s top-manage-ment team can affect the planning process As a result, the study of OB can improve aCEO’s and top management team’s planning abilities and allow them to increase organiza-tional performance

ORGANIZINGIn organizing, managers establish a structure of work relationships that

determines how members of an organization will cooperate and act jointly to achieveorganizational goals Organizing involves grouping employees into groups, teams, or de-partments according to the kinds of tasks or jobs they perform At Southwest and Xerox, forexample, the technicians who service and maintain their products (planes and copiers) aregrouped into the service-operation department; and their salespeople are grouped into thesales department

OB offers many guidelines on how best to organize employees (an organization’shuman resources) to make the most effective use of their personal skills and capabilities.In later chapters, we discuss various methods of grouping workers to enhance communica-tion and coordination while avoiding conflict or politics At Southwest Airlines, for exam-ple, although employees are members of particular departments (pilots, flight attendants,baggage handlers), they are expected to perform one another’s nontechnical jobs whenneeded

LEADINGIn leading, managers encourage workers to do a good job (work hard, produce

high-quality products) and coordinate individuals and groups so that all organizationalmembers are working to achieve organizational goals The study of different leadershipmethods and of how to match leadership styles to the characteristics of the organization andall its components is a major concern of OB Today, the way managers lead employees is

changing because millions of employees work in self-managed teams—groups of

employ-ees who are given both the authority and responsibility to manage important aspects of their

own work behaviors These groups, for example, are often responsible for interviewing job

applicants and for selecting their new team members who they often train as well Also,these groups work together to improve work methods and procedures that can increase theireffectiveness and help each other raise their own personal job skills and knowledge Themanagers who used to actively supervise the team now play a different role—that ofcoaches or mentors Their new role is to provide advice or support as needed and to cham-pion the team and help it to obtain additional resources that will allow it to perform at ahigher level and earn greater rewards as well

CONTROLLINGFinally, in controlling, managers monitor and evaluate individual, group,

and organizational performance to see whether organizational goals are being achieved Ifgoals are met, managers can take action to maintain and improve performance; if goals arenot being met, managers must take corrective action The controlling function also allowsmanagers to evaluate how well they are performing their planning, organizing, and leadingfunctions

Once again, the theories and concepts of OB allow managers to understand and rately diagnose work situations in order to pinpoint where corrective action may be needed.Suppose the members of a group are not working effectively together The problem might bedue to personality conflicts between individual members of the group, to the faulty leader-ship approach of a supervisor, or to poor job design OB provides valuable tools managerscan use to diagnose which of these possible explanations is the source of the problem, and itenables managers to make an informed decision about how to correct the problem Control atall levels of the organization is impossible if managers do not possess the necessary organi-zational-behavior knowledge The way in which Joe Coulombe founded a retail companycalled Trader Joe’s, which follows this approach to managing OB, illustrates many of theseissues as the following OB Today suggests

accu-CONTROLLING

Monitoring and evaluatingindividual, group, and organiza-tional performance to see whetherorganizational goals are beingachieved.

ORGANIZING

Establishing a structure of ships that dictates how members of an organization work together to achieve organizational goals.

customers with upscale specialty products such aswine, drinks, and gourmet foods Coulombe changedthe name of his stores to Trader Joe’s and stocked themwith every variety and brand of California wine thatwas produced He also began to offer fine foods likebread, crackers, cheese, fruits, and vegetables to com-plement and encourage wine sales His planning paidoff, customers loved his new upscale supermarket con-cept, and the premium products he chose to stock soldquickly—and they were more profitable to sell.

From the beginning, Coulombe realized that findinga new niche in the supermarket business was only thefirst step to help his small, growing company succeed.He knew that to encourage customers to visit his storesand buy more expensive gourmet products, he neededto provide them with excellent customer service So, hehad to find ways to motivate his salespeople to performat a high level His approach to organizing was to de-centralize authority and empower salespeople to takeresponsibility for meeting customer needs Rather thaninstructing employees to follow strict operating rulesand to get the approval of their supervisor before making customer-specific decisions,employees were given autonomy to make their own decisions and provide personal-ized customer service This approach led employees to feel they “owned” their super-markets, and Coulombe worked to develop a culture based on values and norms aboutproviding excellent customer service and developing personalized relationships withcustomers, who are often on first-name terms.

Coulombe led by example and created a store environment in which employees weretreated as individuals and felt valued as people For example, the theme behind the de-sign of his stores was to create the feeling of a Hawaiian resort: employees wear loudHawaiian shirts, store managers are called captains, and the store décor features lots ofwood and Tiki huts where employees provide customers with food and drink samplesand interact with them Once again, this helped to create strong values and norms thatemphasize personalized customer service.

Finally, Joe Coulombe’s approach was strongly influenced by the way he went aboutcontrolling salespeople From the outset, he created a policy of promotion from within thecompany so that the highest performing salespeople could rise to become store captainsand beyond in the organization And, from the beginning, he recognized the need to treatemployees in a fair and equitable way to encourage them to develop the customer-oriented values and norms needed to provide personalized customer service He decidedthat full-time employees should earn at least the median household income fortheir communities, which averaged $7,000 a year in the 1960s and is $48,000 today—an

The Trader Joe's approach to organizing entails decentralizingauthority and empowering salespeople to take responsibility formeeting customer needs Employees are given autonomy tomake decisions and provide personalized customer service.

Managerial Roles

Managers perform their four functions by assuming specific roles in organizations A role is a

set of work behaviors or tasks a person is expected to perform because of the position he or sheholds in a group or organization One researcher, Henry Mintzberg, has identified ten roles thatmanager’s play as they manage the behavior of people inside and outside the organization (suchas customers or suppliers).5(See Exhibit 1.5.)

per-EXHIBIT 1.5

Types of Managerial Roles

Type of RoleExamples of Role Activities

Figurehead Gives speech to workforce about future organizational goals and objectives; opens a new

corporate headquarters building; states the organization’s ethical guidelines and principles of behavior that employees are to follow in their dealings with customers and suppliers.Leader Gives direct commands and orders to subordinates; makes decisions concerning the use of

human and financial organizational resources; mobilizes employee commitment toorganizational goals

Liaison Coordinates the work of managers in different departments or even in different parts of the

world; establishes alliances between different organizations to share resources to producenew products

Monitor Evaluates the performance of different managers and departments and takes corrective

action to improve their performance; watches for changes occurring in the industry or insociety that may affect the organization

Disseminator Informs organizational members about changes taking place both inside and outside the

organization that will affect them and the organization; communicates to employees theorganization’s cultural and ethical values

Spokesperson Launches a new organizational advertising campaign to promote a new product; gives a

speech to inform the general public about the organization’s future goals.Entrepreneur Commits organizational resources to a new project to develop new products; decides to

expand the organization globally in order to obtain new customers.Disturbance handler Moves quickly to mobilize organizational resources to deal with external problems facing the

organization, such as environmental crisis, or internal problems facing the organization, such as strikes

Resource allocator Allocates organizational resources between different departments and divisions of the

organization; sets budgets and salaries of managers and employees.Negotiator Works with suppliers, distributors, labor unions, or employees in conflict to solve disputes or

to reach a long-term contract or agreement; works with other organizations to establish anagreement to share resources

SKILL

An ability to act in a way thatallows a person to perform well in his or her role.

astonishingly high amount compared to the pay of employees of regular supermarketssuch as Kroger’s and Safeway Moreover, store captains, who are vital in helping create andreinforce Trader Joe’s store culture, are rewarded with salaries and bonuses that can ex-ceed $100,000 a year And, all salespeople know that as the store chain expands, they mayalso be promoted to this level In sum, Coulombe’s approach to developing the right set oforganizational behaviors for his small business created a solid foundation on which thisupscale specialty supermarket has grown and prospered.

Managers need three principal kinds of skill in order to perform their organizational functionsand roles effectively: conceptual, human, and technical skills.6

Conceptual skills allow a manager to analyze and diagnose a situation and to distinguish

between cause and effect Planning and organizing require a high level of conceptual skill, as dothe decisional roles previously discussed The study of OB provides managers with many of theconceptual tools they need to analyze organizational settings and to identify and diagnose thedynamics of individual and group behavior in these settings

Human skills enable a manager to understand, work with, lead, and control the behaviors

of other people and groups The study of how managers can influence behavior is a principalfocus of OB, and the ability to learn and acquire the skills needed to coordinate and motivatepeople is a principal difference between effective and ineffective managers

Technical skills are the job-specific knowledge and techniques that a manager requires to

per-form an organizational role—for example, in manufacturing, accounting, or marketing The cific technical skills a manager needs depend on the organization the manager is in and on his orher position in the organization The manager of a restaurant, for example, needs cooking skills tofill in for an absent cook, accounting and bookkeeping skills to keep track of receipts and costs andto administer the payroll, and artistic skills to keep the restaurant looking attractive for customers

spe-Effective managers need all three kinds of skills—conceptual, human, and technical Thelack of one or more of these skills can lead to a manager’s downfall One of the biggest problemsthat entrepreneurs confront—a problem often responsible for their failure—is lack of appropri-ate conceptual and human skills Similarly, one of the biggest problems faced by scientists,engineers, and others who switch careers and go from research into management is their lack ofeffective human skills Management functions, roles, and skills are intimately related, and theability to understand and manage behavior in organizations is indispensable to any actual orprospective manager over the long run

Challenges for OB

In the last few decades, the challenges facing organizations to effectively utilize and develop theskills, knowledge, and “human capital” of their employees have been increasing As we notedearlier, among these challenges, those stemming from changing pressures or forces in the socialand cultural, global, technological, and work environments stand out To appreciate the waychanges in the environment affect behavior in organizations, it is useful to model an organization

from an open-systems perspective In an open system, an organization takes in resources from

its external environment and converts or transforms them into goods and services that are sentback to that environment, where customers buy them (see Exhibit 1.6)

CONCEPTUAL SKILLS

The ability to analyze and diagnosea situation and to distinguishbetween cause and effect.

HUMAN SKILLS

The ability to understand, workwith, lead, and control the behav-ior of other people and groups.

TECHNICAL SKILLS

Job-specific knowledge and techniques.

InputStage

•Raw materials•Money and capital•Human resourcesOrganization obtains inputs from its environment

ConversionstageENVIRONMENT

•Machinery•Computers•Human skillsOrganization transforms inputs and adds value to them

Sales of outputsallow organizationto obtain newsupplies of inputs

Outputstage

•Goods•ServicesOrganization releases outputs toits environment